Correlation Between Sinosun Tech and Porton Fine

Can any of the company-specific risk be diversified away by investing in both Sinosun Tech and Porton Fine at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Sinosun Tech and Porton Fine into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Sinosun Tech and Porton Fine Chemicals, you can compare the effects of market volatilities on Sinosun Tech and Porton Fine and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Sinosun Tech with a short position of Porton Fine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sinosun Tech and Porton Fine.

Diversification Opportunities for Sinosun Tech and Porton Fine

0.03

Correlation Coefficient

Sinosun Tech  Porton Fine

Significant diversification

The 3 months correlation between Sinosun and Porton is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Sinosun Tech and Porton Fine Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Porton Fine Chemicals and Sinosun Tech is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Sinosun Tech are associated (or correlated) with Porton Fine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Porton Fine Chemicals has no effect on the direction of Sinosun Tech i.e., Sinosun Tech and Porton Fine go up and down completely randomly.

Pair Corralation between Sinosun Tech and Porton Fine

Assuming the 90 days trading horizon Sinosun Tech is expected to under-perform the Porton Fine. In addition to that, Sinosun Tech is 1.93 times more volatile than Porton Fine Chemicals. It trades about -0.08 of its total potential returns per unit of risk. Porton Fine Chemicals is currently generating about 0.0 per unit of volatility. If you would invest  1,676  in Porton Fine Chemicals on December 25, 2024 and sell it today you would lose (28.00) from holding Porton Fine Chemicals or give up 1.67% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Sinosun Tech  vs.  Porton Fine Chemicals

Sinosun Tech

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sinosun Tech has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Porton Fine Chemicals

Risk-Adjusted Performance

Very Weak

Over the last 90 days Porton Fine Chemicals has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Porton Fine is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Sinosun Tech and Porton Fine

The main advantage of trading using opposite Sinosun Tech and Porton Fine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sinosun Tech position performs unexpectedly, Porton Fine can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Porton Fine will offset losses from the drop in Porton Fine's long position.

The idea behind Sinosun Tech and Porton Fine Chemicals pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.